Prior to the rise of e-commerce and retail giants such as eBay and Amazon, orders were handled via direct mail and fax. Initially, orders were received from catalogues but as businesses scaled operations to meet increasing consumer demands, orders began to flood in from multiple sources. The need to effectively handle rising demands using streamlined processes gave rise to modern-day Order Management Systems.
Wholesalers – regardless of industry – rely on order management systems as indispensable tools to process, manage, and acknowledge orders fasters. In a consumer-driven world where whoever meets the customers’ demands the fastest wins, businesses that stand to gain the most benefits from order management solutions are those present within the Food and Beverages industry.
According to Statista, a staggering $1.4 billion in revenue was generated by the Australian Food and Beverage industry in 2019. Small to medium-sized businesses are making use of web and mobile-based order management software to manage orders in increasingly efficient, affordable, and accurate ways.
In this article, we’ll attempt to understand the functionality and benefits of order management systems.
What are Order Management Systems?
As the name implies, order management systems assist businesses in organising and streamlining the order fulfilment process. However, that simply represents its core functionality whereas good management systems enable businesses to do much more.
A fully integrated order management system makes businesses operate as smoothly and efficiently as possible by automating every step. It’s a holistic system that manages every aspect of an omnichannel company including order processing, CRM/customer service, inventory management, warehouse management, call centre management, accounting, and marketing.
Order management systems also take into account all the “external” processes and data needed to enhance a company’s supply chains. The software is integrated with a wide range of external processes such as shopping channels, e-commerce websites, marketing services, fraud prevention, shippers, and payment processors.
Essentially, the software is a complete business management tool that isn’t just limited to order management but also unifies important processes and data into a single system.
A Step-By-Step Look at How Order Management Systems Work
There exist a number of steps or “moving parts” that go into the selling process. Here, we’ll take a look at a usual customer transaction and how order management solutions help businesses control the entire process.
The sales process starts off with the customer browsing through the products a business has to offer. This can be done in person, through a catalogue, or take place in an online store. Even before the sale takes place, the order management system works to display the correct and updated inventory to the customer.
Before moving onto the next step, it’s worth noting that OMS can notify businesses of items placed inside the shopping cart. This is of great benefit to businesses because even if the customer does not complete the purchase, the feature allows management to figure out why that happens. That way, an online store can send incentives and discounts to influence the customer into purchasing cancelled items.
The second step involves the customer placing an order either in person, on the phone, or online. As soon as the order is processed, the inventory numbers are updated and the OMS generates a unique order I.D number which tracks the entire process.
The third step is when the customer pays for the order which prompts the OMS to generate a receipt or invoice and also update the accounting system. The payment information is then verified by the system.
The fourth and final step is when the shipping process begins with the customers having the option to have their order(s) delivered or picked up in-store. In such cases, the OMS sends the delivery and ETA details to the customers and updates the order tracking process.
It should be noted that this represents a general view of how the sales process takes place and the complexity and number of transactions differ from business to business and indeed, from one industry to another. The hallmark of a good order management system lies in its ability to streamline processes and centralize information.
Does My Business Really Need an Order Management Solution?
Order management systems include a number of beneficial modules necessary for the smooth operations of a business. Without a unified management system, companies will have to rely on separate tools for accounting, POS, warehouse management, and customer service. A unified OMS enables businesses to access accounting data, manage interactions and customer information, update warehouse inventory, and customize the retail POS all from a single software.
Businesses with quality OMS experience smoother operations owing to real-time information pertaining to inventory management, sales forecasts, and information on orders. The system acts as a centralized data hub allowing managers to make faster and more accurate decisions, eliminate guesswork, prevent over or under-stocking, and design effective marketing campaigns.
Perhaps the most outstanding feature of OMS is their ability to add value to businesses regardless of industry. For instance, in the Food and Beverages industry, the availability and accessibility of raw materials are closely linked to the quality of products offered by a restaurant or café. Since fresh produce has a short shelf-life, food businesses need to connect with all suppliers on a single platform. Doing so improves communication, enhances customer experience, and allows businesses to focus more on producing quality offerings for its customers.
The Benefits of Order Management Systems
Now that we’ve gained a good understanding of how order management systems actually function, it’s time to take a look at the benefits and competitive advantages it provides to businesses.
Reduces Errors and Saves Time
As mentioned previously, a unified OMS eliminates the need to purchase and maintain a number of costly software for crucial tasks such as taking orders, coordinating between the shipping and warehouse departments, and creating shipping labels.
With just a single centralized management system, less time is spent integrating different departments and drafting complex plans to have everything work together. Instead, businesses that implement an OMS record fewer errors in shipping, delivery, inventory, and accounting processes.
A single, unified OMS is quite literally a one-stop solution for businesses seeking to make moving parts such as call centres, retail POS and warehouses synergise and work together. This leads to greater turnaround time and accuracy.
Results in Considerable Cost Savings
Switching to an OMS doesn’t just save you from wasted time and errors but also results in considerable cost savings for your business. Purchasing an order management system frees businesses from the need to purchase a number of expensive software for separate inventory, accounting, customer service, marketing, and shipping software.
Another way companies can save money is from the influx of real-time data provided by the system. For example, inventory data can reveal which products consistently record low sales. Businesses can then decide to improve the product or remove it from the catalogue altogether. Interconnected data offered by the software grants hidden insights into consumers purchasing patterns which can then be utilized to make informed decisions conducive to financial growth.
OMS systems also do away with a costly e-commerce aspect that many businesses cannot seem to negate i.e. high shipping rates. Outbound shipping costs are a major thorn for businesses and knowing the best rates help companies save a lot of money. An order management system allows management to compare and review different shipping rates across regional and national carriers and select the one that best fits the budget.
Can Easily Integrate with Existing Systems
Companies have been known to show reluctance when it comes to having additional management software alongside existing systems such as accounting software, e-commerce providers, and email marketing systems. They’ve either gotten complacent with existing software are simply fail to see the real value of OMS.
Fortunately, OMS systems can easily integrate into existing systems without causing any disruptions. Also, there’s no longer a need to carry data from one system to another since the software is a holistic solution covering every aspect of management functions. It’s also worth mentioning how some OMS also offer mobile and cloud-based capabilities. This added level of convenience enables businesses to access their suppliers from anywhere at any time.
Using an order management system for your business will help streamline core functions, improving product quality, and enhancing the overall customer experience. Ordertron offers order management business software for small to medium-sized food and beverage companies. It’s designed to make businesses run better by removing the hassle of placing and receiving foodservice orders. Contact them today for more information.